NVDA 2026 Thesis - Becoming a Structural AI Compounder - $300 PT - 60% potential upside

**My PT For NVDA is $300 this year, with a potential 60% upside.** **The street discount the future revenue of the business and the terminal value** DCF breakdown: * FY 2026: ***FCF*** $89.5$ bil (+47%) * FY 2027: ***FCF*** $124.3$ bil (+39%) * FY 2028: ***FCF*** $147.9$ bil (+19%) * CAGR onward + 14% The biggest spenders are increasing their CAPEX heavily. (These are estimates and you can expect them to overachieve that amount, as they got the street green light) |Company|2025 Est|2026 Est|YOY Growth| |:-|:-|:-|:-| |Meta|$72|$125|74%| |Amazon|$131|$200|53%| |Alphabet|$120|$180|50%| |Microsoft|$100|$155|55%| |Total|$423|$660|56%| **Bull Thesis - Upward Surprises to Consider** **1- Consensus is high in growth rate for 2026-2027, then it tapers down quickly** * Looking into the verticals and the businesses they are investing in, **they are building their future once the buildup slows down.** * This includes partnerships like **Siemens** (to make efficient AI factories, to improve supply chains). * **Full self driving**, now available to other companies and we can expect that technology to be applied to humanoid robots and deliveries. * **Health sciences / Digital twins** (AI simulations of the real world) and their pace of innovation is underestimated. Most recently Jensen mentioned a new chip will be unveiled at the next GTC (March 2026). **2- That diversification will be key for them in the future** **As they invest in startups and established players, they get deeper into the system** with their AI software, we will see NVDA win even if the big Capex spend slows down a bit **3- Vera Rubin sales will be better than expected** **Blackwell demand exceeded expectations**, and supply execution was stronger than anticipated. Vera Rubin comes in when the AI race is heating up, making it a possibility that some hyperscalers may want to overspend to capture the future business. **It also performs better than Blackwell with a stronger energy efficiency** which is a key bottleneck. **Bear Thesis - Downward Surprises to Consider** **1- Competitors are starting to gain traction (NVDA still owns at least 80-85% of AI MS)** **2- China revenue remains a metric that is hard to put on a spreadsheet, for now** The 10-15% swing of revenue could be quite significant as China may decide to block NVDA chips, if they find better alternatives in the near term. **3- Memory could be a near term bottleneck** # Final comments - NVIDIA is a structural compounder and terminal value remains the key debate We can see it with the partnerships, the high growth rates and the innovation at a pace we never saw before. **NVDA will keep winning and we are still not realising the full extent of the potential payoff**. Even if it’s a highly valued company at $4.6 trillion, the growth rates, the innovation and the technology is difficult to understand. Which makes it a very interesting company to analyse, knowing that there could be big gap between what is priced in and the real value of this company. This is not AI - if you want to have the visuals including the DCF data, you can check my substack with the details - really0riginal. Happy to get into the comments, it seems to be again a underestimated play and it's hard to quantify. I am positively optimistic that this quarter will show great numbers again. Not Financial Advice. Cheers,